Access Financing, Bank Rating, Become Bankable, FICO SBSS, Corporate Only Financing

There is an awful lot being said and sold about Corp Only Financing on the internet, in online videos and much more, so let’s explore the facts.

First, we are in the age of FICO SBSS which is the FICO Small Business Scoring System. Almost all business lenders who are making working capital cash type loans have moved to FICO SBSS as part of their underwriting approval guidelines. What this means is that banks, credit unions, large fintech lenders, the SBA and many others are now using your business FICO credit score as a measure to approve or decline your business loan application with a minimum 160 score being that determining score.

A major part of FICO SBSS is the business owner's personal credit.

The issue with FICO SBSS and Corp Only Financing is that approximately thirty-five percent (35%) of your business FICO score is made up of the personal credit of anyone owning twenty percent (20%) or more of the business. That fact kind of sinks the whole concept of small business working capital cash loans ever being Corp Only where the personal credit is not even looked at to approve the cash out business loans.

By now you are well aware that the internet is full of building business credit promises that claim to get you piles of cash business financing that are not tied to the business owners personally. The good news is that it can be done but there are many factors you and your business will have to complete first.

Let’s start by saying that by building strong business credit scores you are able to be approved for many vendor lines of credit, store and gas credit cards, equipment leases and many other non-cash business financing programs on a Corp Only basis. But beyond those non-cash types of business lines of credit, there is much more than just building strong business credit scores that your business will have to accomplish.

Corp Only working capital cash loan programs are available to businesses, their qualifications are:

• Developing comparable credit of an amount equal to or greater than the loan amount.
• Having at least 12 to 15 business credit reporting tradelines.
• Maintaining a minimum Low 5 Bank Rating for the prior two to three years.
• Having at least $500,000 gross revenue and showing the ability to debt service.
• Having three or more years of filed tax returns along with financial statements.
• Being a legal entity either an LLC or Corporation that is in good standing.
• Having less than thirty-five percent (35%) debt-to-income.
• Making sure the business UCC file is clear with no blanket liens or lis pendens.
• Building business credit scores of 70 or higher with all three business credit agencies.
• Developing a FICO Small Business Score of 200 or higher. The range is 0 to 300.

There are a few more items that your business will need to complete if your goal is to obtain Corp Only working capital cash financing, but the above ten are the major ones. Be aware that all small business loans where the SBA approves a percentage guarantee of that loan to the bank that funds it are personally guaranteed, will check the personal credit of anyone owning twenty percent (20%) or more of the business and they will file a blanket UCC-1 encumbrance covering all past, present and future assets of the business.

The good news is that there are thousands of business-to-business credit lines (aka Vendor Financing) for products and services that can conserve valuable working capital and that are easier to qualify for on a Corp Only financing basis. These are not cash loans and are typically on net 30 to net 60 payment terms. Some are revolving credit lines which are mostly from the larger brands and are business credit lines for store and fleet gas credit cards. These vendor lines of credit and store or fleet type business credit cards are an excellent way to build strong business credit scores which is vital if you ever want to achieve Corp Only Financing.